Bank of America's Cost Cutting Will Face Scrutiny

NEW YORK ( TheStreet) -- Bank of America ( BAC) is set to report earnings Wednesday morning, and once again the focus will be on how well the bank is doing at cutting expenses.

Analysts are looking for the bank to earn 27 cents per share, compared to 28 cents during the third quarter and 29 cents during the fourth quarter of 2012.

"We doubt that weak Q4 results will have a significant impact on share prices with investors far more focused on core earnings trends for the year ahead," argued Atlantic Equities analyst Richard Staite in a Dec. 19 preview of the banking sector.

"We expect management comments during Q4 conference calls to generally remain upbeat with stronger economic growth, a steeper yield curve and stronger equity revenues all being supportive for the sector," he continued, adding that "against that background" he still ranks Bank of America as his top pick.

Indeed, as Staite predicted, JPMorgan Chase (JPM) Chairman and CEO Jamie Dimon was upbeat when that bank reported earnings Tuesday. After an analyst characterized him as being "cautiously optimistic," Dimon corrected him.

"We didn't use the word cautiously optimistic, we're using the word optimistic because we are actually optimistic. And if you have the U.S. economy starting to grow we will see loan growth and volume growth and - across all these businesses. We are actually optimistic about the U.S. economy in particular," Dimon said.

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